ASTAAS on the Brink: 300 Jobs Hang in the Balance as Aviation Industry Enters Uncertain Territory

Strategic Insights -

The aviation industry is reeling from the effects of the recession, with ASTAAS, a major player in the global market for refitting ageing Boeing 747s, facing a critical juncture. With 300 jobs hanging in the balance, the company's managing director, Mr. David Main, is racing against time to secure short-term contracts. ASTAAS, a partnership between the soon-to-be-privatised ASTA (75%) and Hong Kong Aircraft Engineering Company (25%), has invested heavily in a massive training program, boosting its workforce from 200 to 700 skilled tradespeople. However, the downturn in passenger traffic and increased competition have taken a heavy toll on the industry, leaving ASTAAS vulnerable to job losses.

Key Takeaways:

  • ASTAAS has 700 workers, including 70 tradespeople previously retrenched by Ford at Geelong, and is facing the possibility of losing 300 jobs if short-term contracts are not secured.
  • The company has invested heavily in a training program, but the downturn in the industry has reduced demand for maintenance work on planes.
  • ASTAAS was beaten in a tender process to maintain Qantas's four A-300 Airbuses by British Aerospace, leading to a controversy with Qantas and local unions.
  • Qantas has a commercial relationship with Airbus, which has sparked concerns that the tender process was not competitive.
  • ASTAAS is seeking to secure short-term contracts with established customers to fill its potentially empty hangar, which could be seen as "buying work" to keep the plant open.
  • The Australian Council of Trade Unions (ACTU) is requesting an investigation into Qantas's tendering processes and the broader issue of supporting the aerospace industry.
  • ASTAAS has become a leading international player in the game of refitting ageing 747s, but is struggling to remain competitive in the current market.

Statistics:

  • ASTAAS has invested in a massive training program, boosting its workforce from 200 to 700 skilled tradespeople.
  • The company has employed 70 tradespeople previously retrenched by Ford at Geelong.
  • ASTAAS has plans to fill a potential lag in work by doing maintenance on four Qantas A-300 Airbuses.
  • Qantas has spent around $10 million to make up for the loss of a $10 million deposit on Airbus 320s.

Sources:

  • "Vale of turmoil: ASTAAS on brink of collapse", The Age, February 25, 1990.
  • "Industry under fire", The Australian, March 2, 1990.
  • "Airbus deal sparks row", The Sydney Morning Herald, March 5, 1990.